Inconsistent transfer prices and the location of mobile capital

Research output: Contribution to journalArticleScientificpeer-review

Abstract

We investigate the effects of inconsistent transfer prices on the location and efficiency of capital investments made by multinational firms in a competitive equilibrium. Inconsistent transfer prices create the potential for double taxation. We examine the effects of inconsistent transfer prices on production decisions, production efficiency, and repatriation behavior. We also show how transfer price inconsistency affects the consequences of U.S. tax policy choices relating to the corporate income tax rate, deferral of U.S. taxation of active foreign source income, and the taxation of foreign income on a territorial basis instead of a worldwide basis.
Original languageEnglish
Pages (from-to)1085-1109
JournalNational Tax Journal
Volume63
Publication statusPublished - 2010

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Transfer price
Income
Taxation
Competitive equilibrium
Tax policy
Corporate income tax
Tax rate
Multinational firms
Policy choice
Capital investment
Production efficiency
Double taxation
Inconsistency
Repatriation

Cite this

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title = "Inconsistent transfer prices and the location of mobile capital",
abstract = "We investigate the effects of inconsistent transfer prices on the location and efficiency of capital investments made by multinational firms in a competitive equilibrium. Inconsistent transfer prices create the potential for double taxation. We examine the effects of inconsistent transfer prices on production decisions, production efficiency, and repatriation behavior. We also show how transfer price inconsistency affects the consequences of U.S. tax policy choices relating to the corporate income tax rate, deferral of U.S. taxation of active foreign source income, and the taxation of foreign income on a territorial basis instead of a worldwide basis.",
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publisher = "National Tax Association",

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Inconsistent transfer prices and the location of mobile capital. / De Waegenaere, A.M.B.; Sansing, R.

In: National Tax Journal, Vol. 63, 2010, p. 1085-1109.

Research output: Contribution to journalArticleScientificpeer-review

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AB - We investigate the effects of inconsistent transfer prices on the location and efficiency of capital investments made by multinational firms in a competitive equilibrium. Inconsistent transfer prices create the potential for double taxation. We examine the effects of inconsistent transfer prices on production decisions, production efficiency, and repatriation behavior. We also show how transfer price inconsistency affects the consequences of U.S. tax policy choices relating to the corporate income tax rate, deferral of U.S. taxation of active foreign source income, and the taxation of foreign income on a territorial basis instead of a worldwide basis.

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